On cooperating: firms, relations and networks

Abstract

Firms operate in the context of business relations and networks that affect the nature and outcomes of their actions and which are potential sources of competitive advantage. Relations and networks represent a challenge for management because firms are unable to control or direct these relations or networks or predict the outcomes of their actions. Firms are continually adapting their actions and associated “network theories” in the light of their experience, and network structure and behavior emerge through the local interaction of network members in a bottom-up self-organizing way. We draw on recent advances in the study of complex self-organizing systems to consider the implications for the management of firms in networks. The role and importance of cooperative strategies in contributing to the self-organizing process are discussed as well as more general participation and adaptation processes. We conclude with a discussion of the research implications arising.